Why Should They Buy From You?

Understanding your customer

Understanding their buying preferences; their purchase decisions and things like that is very crucial to understanding how to position yourself to maximize the reach to your customers and conversion of your customers and build a customer-focused brand. So, ‘How can you position yourself in the minds of the customers?’ rather than just talking about market share or talking about how to actually increase your market share. It’d be better to think ‘where am I in terms of the “minds” of the customers’; ‘where’s our brand in terms of the minds of our customers’. I’ll start this discussion off with an example comparing iPod with Microsoft Zune. When the iPod came out, they re-defined the MP3 market and they became subsequently the leaders of the MP3 market.

Microsoft thought, ‘Right, Apple is succeeding because of its iPod; because of its foray into the music industry, and because people were buying the iPads, and, consequently, they were also buying iMacs and, you know, Macbook pros and things like that’. So they thought let’s compete with Apple by launching our own MP3 player which is the Zune, and that’s a classic mistake! If you have a leader in your market, you don’t actually just go after the leader with a similar service or a similar product and hope that you can actually reach up or catch up with them. It’s just… that’s not how it works. Instead, if Microsoft had positioned its MP3 player in a different way.. if it had framed it differently, and if it had gone after a different market segment, it probably would have had a better success rate.

This happens almost with every business where companies try and go after the market leaders by simply saying that they are better or by simply saying that their product or service is better. It’s a classic mistake. It goes nowhere. As you’ve seen with Zune.

A Burger by any name

The next example I’d take is McDonald’s, Vs Burger King. Now, of course, McDonald’s dominates the burger market. They have, I think, 40,000… 35/40,000 stores around the world; sixty, seventy million customers a day! And Burger King was always played second fiddle to McDonald’s. Actually, it.. it tied its position.. No. 2 position with Wendy’s for a long time, and then with a change in the agency that was doing their marketing, they sort of pushed ahead into the second position, then had a few faux pas, you know, bad marketing, bad advertising decisions and then they fell back. So, anyway, if you look at McDonald’s Vs Burger King, again, you’ll see that the positioning is important.

When McDonald’s positioned itself as kid-friendly.. is because the way they… they… their philosophy is based on the fact that if they attract the kids, then the parents are bound to come along with them, I mean they are forced to, literally. If a kid wants to go to McDonald’s, you got to go to McDonald’s. So, that way the whole family goes to McDonald’s. Burger King initially tried this same strategy.. could not really work it out, and later on, realized ‘ok, maybe we should try and reach for the more grown upmarket’… trying target people that are… that wanna be grown-up. And so they had, you know, grown-up campaigns where were targeting teenagers, maybe older, and… and, you know, men… 18 to 30 with their ads, they even tried to use a bit of …, how shall I say, how shall I put it delicately, a lot of sex in their ads which did back-fire a little bit, but they then alienated a lot of their customer base by doing that. So, positioning is very important.

If you look at Wendy’s, their positioning is unique; they don’t try and compete with McDonald’s, at least, not in terms of their marketing message… and KFC’s entirely different… their branding, their positioning, even their, of course, their menus and their recipes are different. But, you can… you can see that their entire campaign is different.

So, saying that you offer the same service but better is not going to cut it.

Competitive Difference

If you’re in a market where you’re trying to catch up or you’re trying to compete with already successful businesses, then you need to consider your positioning – a competitive difference is the essence of positioning. So, what do I mean by that? A competitive difference? Well, when you try to differentiate your company, there are various touch points where you can actually differentiate your company. If, for example, the service is the same or the product is similar to your competition, then differentiating factors can be quality.. yes, price…yes, but beyond that are the brand stories. Stories can be used to differentiate yourself and differentiation lead to positioning.

What and how do you position?

Take the benefits of your service and product and make them meaningful to your customers. Frame the benefits of your service in a way that motivates your customers. Find an emotional benefit that drives your brand position. If you go back to iPod once again, their initial marketing tagline was “a thousand songs in your pocket”. So, till that time all MP3 players were talking about their memory storage; these many MBs; these many gigs; their processors, maybe… they were talking about the hardware, and so on and so forth. So, iPod came in and they didn’t talk about all these specifications; they just said: “a thousand songs in your pocket” which immediately visualized their benefit or how they were different or why they were better than the competition.

I want to also take an example of one of our clients – a lawn care business in Tampa, Florida, and when we were working with them to formalize their brand strategy, the question was that they provided a similar kind of service to a dozen other lawn care and landscape services within the geographical location – Tampa, Clearwater, and the surrounding areas and even up to Sarasota. So, how could we position them to stand out from the competition and to raise themselves above the noise of what the others were saying about themselves?

We went back to the roots and said ‘Fine, what makes you different?’, and after much soul-searching, the client was able to distill their core difference which was that they call themselves ‘exterior decorators’, just like ‘interior decoration’. They felt that they were ‘exterior decorators’. Of course, that is what all lawn care companies do! But saying that out; using that in marketing and positioning themselves as experts at ‘exterior marketing’ is what really set them apart, and immediately this business not only set themselves apart but they started attracting a different kind of clientele… the more elite, the more high-scale customers because that target market was actually looking for people or companies that would go beyond just basic landscaping.

So, even though this company was offering similar services to a dozen others, they immediately caught a lot of traction and they were able to raise their profile and get better clients, bigger clients and more expensive, or rather, they were able to charge more for same or similar service. So, this, in essence, is what positioning is all about.

You position your company in relation to your competition, in relation to the market, in relation to your target customers so that you not only move ahead of the competition but also you were able to dictate the kind of target market, the kind of customers you get, the prices you charge and the way you run your business. So, rather than being reactive, you’ll be in a proactive mode.

Just another example… when we talk about categories and owning categories is a classic example of Volvo. They.. they started with ‘safety’ as their differentiating factor. They said their cars were the safest. And their marketing, their literature, their ads, everything centered, focused on the safety aspect of their cars. They had videos of crashless dummies sitting in the Volvos, they had very dramatic ads that showed that these cars were the safest around, and even till today they maintain that position; they are leaders of that category. That shows they are pretty safe cars. But I’m sure a lot of other cars are also as safe as Volvos… maybe more. But this idea of ‘safety’ was entrenched in the customer’s mind in the audience’s mind. And people don’t usually change their perceptions or their ideas… once they are entrenched. And ‘safety’… ‘Volvo’ that’s it. Unless you are in the progressive field of Gangster rap – like one of our clients!

What type of positioning can you do?

There are several different types of positioning. And today, I’ll just talk about six of them.

• You can position yourself on quality. Although I said that trying to position yourself or trying to differentiate yourself on quality is not really an effective way …I always say that because everybody tries to offer quality and everybody says that they have better quality… if done in the right way ‘quality’ can be a differentiating factor. This can be seen in the fashion world… in the clothing and fashion industry where it’s all about quality and everyone uses quality effectively to position themselves.
• Next, Value/Price Positioning. Now, we’re going to do a separate episode on pricing strategies and so on and so forth. But value and price positioning are very common. If you look at Walmart, for example, it’s all about value; it’s about being the cheapest around. Or, on the other hand, if you look at Patek-Philip or Courtier or any of the luxury brands, they purposefully price themselves so high that they become exclusive and that’s one strategy. I wouldn’t go too much in-depth on pricing strategies in this episode but you can position yourself just by the virtue of your prices — how you price and how you convey the value of your service or product — by your pricing can be a great positioning factor.
• Next, you have ‘benefit positioning’. Now, this is the most commonly used positioning strategy. Everyone… everyone and their dog uses this brand positioning strategy. ‘Benefit positioning’, ok, these are the benefits of our service or product. If you buy our product, you gonna have a lot of free time; you gonna enjoy with your family, or… the other day, I was… I actually saw an ad by Nescafe where they came… they’re coming out with this new gold premium… something ‘Bru’, and they were actually talking about … they were… they were in effect saying “if you buy this, you actually going to be better off; you’re going to be prosperous.” I don’t know how that works, but that positioning about benefits is, ridiculous benefit to be honest. So, benefit position.
• Next, ‘Problem/Solution Positioning’. A lot of companies position themselves in a problem/solution framework. So, they talk about the problem they are solving for you. They don’t necessarily talk about their product or the benefits or the features or specifications, but they talk about it in terms of the problem you have and the solution that they are providing to that problem. This is very interesting, and if done correctly, is a very powerful and effective strategy.
• Next, Competitor Based Positioning. This is where companies use, or rather, they talk about their competition to position themselves. Now, in fact, even Apple did that. If you remember a few years back they had this ‘I’m a Mac!’; ‘I’m a PC.’ Kind of ads where the PC was represented by this guy… a bit stout guy in a suit, and then the Mac guy was …, I think it was Justin Long or somebody,… you know, very slim; very modern-looking, you know, hip and stylish. So, that’s Competitor Based Positioning where you talk about your competition and you trying to.. you trying to dish them to make your product or service to look good. Now, this can be a powerful strategy, but you got to be really careful with this strategy… because sometimes you can end up looking overly aggressive and you can.. you can, you know, clients can get turned off. So, you could also, of course, go the other way and, in fact, there are companies who actually recommend their competitors… if they believe that the service that they offer is not right for you. In fact, we, as a company at Spellbrand, use that strategy quite a lot. If we get a… if we get an inquiry and the customer is looking for something that we don’t necessarily would like to do … we often recommend some of the competition and say ‘ok, ok, maybe you can try these guys… you know, they… they might be able to handle this work’. That actually builds a lot of brand value and we’ve really found that to be effective.
• Finally, you have ‘Celebrity-Driven Positioning’. This is all about … talking about the high-flying clients, the big clients that.. that you have serviced or that are associated with your brand, and can be very effective, and, of course, is used by all top brands… by endorsements and by advertising and so on and so forth. Ok, so, let me get back.

That is… those are the different strategies in terms of positioning strategies. I’ll try to do future episodes on each of these, especially the pricing strategy… I’m very interested in that, and also do the ‘problem and solution positioning’; ‘competitor based positioning’ also I’m doing an episode.

Hopefully, you found this interesting. Just to recap, to be able to get ahead of the competition or to dominate a particular market or category, you need to understand positioning and apply that to your business. You should ask the question ‘why should the clients buy from you; and not from your competition.’ That will generate the answers that will lead to good positioning. If you have any questions about this, please ping me and I’ll be happy to answer them.